Inclusive Economic Growth and Resilience in the 21st Century Europe

: A Spatial and Temporal Examination of Regional Economic Growth, Resilience, and Earnings Inequality

Abstract

Many economists have broadly written about inclusive growth and economic resilience, but little is known about why some regional economies have grown in more inclusive ways than others have. Hence, this study explores regional inclusive growth and earnings inequality in the European Union (EU), the Economic Free Trade Area (EFTA), and the United Kingdom (UK) at the NUTS 1 level, covering the period 2004–2018. This study makes three main contributions to the literature. First, it interrogates the links between regional earnings inequality, human development, and economic growth within the resilience framework. Second, it provides a new measure which computes inequality in earnings growth, the Gini of Growth. This new measure is integral to a new conceptual framework, the Inequality Matrix, which categorises regions by levels of inequality. Third, it provides a critical appraisal of existing definitions and measures of inequality and inclusive economic growth, while combining economic growth and earnings inequality into a new single measure, the Inclusive Growth Matrix, which measures the level of inclusiveness in regional economies. The study goes further to examine how the “economic growth-earnings growth inequality” relationship differs during different economic phases. To provide a better context and insight into the distribution of regional inequality and inclusive growth, the Esping-Andersen classification and Post-Communist regimes were applied to classify regions. This study uses EU Statistics on Income and Living Conditions (EU-SILC) and GVA datasets to analyse regional trends and patterns in economic growth, employee productivity, earnings, and human development. The results show that when resilience is considered as the economy's capacity to absorb a financial shock, regions in Conservative regimes are the most resilient. When resilience is defined as the scale at which an economy recovers from a downturn, regions in Social Democratic regimes fare the best. The results also show that earnings inequality is more pronounced in regions across Liberal and Social Democratic regimes. Finally, regions in Social Democratic regimes are proportionally the most exclusive regions when income is segregated by earnings from employment. These results highlight the importance of appreciating nuances in the inclusive growth discourse. However, more research is needed to examine causation between variables for targeted policy solutions and there is also need to explore the subject of economic resilience further, to establish a universal definition.

Date of Award	28 Jun 2024
Original language	English
Awarding Institution	University of Portsmouth
Supervisor	Humphrey Southall (Supervisor), Adam Cox (Supervisor) & Donald Sinclair Houston (Supervisor)